Many property managers are still using outdated methods to manage their accounting and bookkeeping for their portfolio. These legacy systems and spreadsheets are inefficient and extremely time-consuming, not to mention they increase the risk of errors.
The issues with these processes are made very apparent in periods of high tenant turnover and uncertainty.
The COVID-19 pandemic is one of these times for the majority of landlords and property managers. Meaning those who were using these archaic bookkeeping methods are at an immediate disadvantage to their competitors and have quickly fallen behind.
Accounting software tools, such as Xero, are extremely useful for property managers at the best of times, but they really show their advantages in times like these.
How it helps
During a period of such uncertainty, property owners and managers have found themselves overwhelmed by a high tenant turnover, causing many to change the way they carry out the bookkeeping within their business.
Cloud-accounting software has been key to helping property managers cope with these unprecedented circumstances. High tenant turnover leads to ambiguity, but accounting software can provide clarity.
Through accounting software, property managers are able to precisely deal with and track rental invoices and registered deposit charges without confusion. The systems allow for underpayments and overpayments which have demonstrated to be extremely useful in a time like this where tenants may be unable to pay their rents in full.
The reconciliation page within the software enables property managers to be able to match all their invoices with transactions from their live bank feed. This feature grants the property manager the ability to correctly pay off all invoices that come into their accounts easily and efficiently.
With all financial information in one place, managing finances is much more efficient. By simplifying processes, property managers can save valuable time, which can be used to focus on retaining their tenants.
Periods of high tenant turnover are extremely stressful for property managers and their time can be stretched extremely thin. Coupled with using outdated accounting processes, this can result in a high number of errors occurring.
Using a single platform that all stakeholders can access reduces the chance of errors by taking away the need for separate records that need to be linked, compared and reconciled.
The financial clarity that accounting software provides, allows you to communicate clearly with your tenants any upcoming rent or other payments so there are no surprises for either party. As a result, tenant satisfaction will increase and in turn reduce tenant turnover.
Integrations with property management software
Another great advantage of accounting software is that it can be integrated with many property management software. Integrating property management software with accounting software is a powerful combination.
Rent tracking can be automated by transferring data and charges created in the property management software directly into Xero, which saves even more time. Having everything you need to manage the entire tenancy journey on one platform is invaluable at times of high tenant turnover.
The combination of the two is an obvious choice for those in the UK property market that want to bring a sense of harmony to their financials during such difficult circumstances.
Use your Xero expertise to help and win more property management clients.